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The Dining and
Occasional Furniture sector forms part of the overall UK Furniture
market, which consists of Upholstered Furniture and Beds, Bedroom
Furniture, Kitchen Furniture, Bathroom Furniture and Home Office
Furniture. In 2005, the overall market was worth approximately £3.8
billion at MSP (Manufacturers Selling Prices).
The Dining and Occasional Furniture sector has remained
fairly static in terms of overall market share, accounting for around
13% of the overall furniture market with an approximate value in 2005 of
£500 million.
As
a mature sector, the dining and occasional market has tended towards
gradual growth sustained over long periods. Between 1999 and 2004 the
market experienced growth levels of between 1% and 3%. However, the
market declined in 2005 by around 4% due to lower levels of consumer
confidence, increasing price competition, a weakening economic climate
and a slowdown in the housing market. In addition, the market
experienced a significant level of restructuring due to the withdrawal
of Silentnight from the cabinet sector, in addition to several
other suppliers going into administration.
The level of
imports has increased substantially in recent years and they now account
for over 60% of the market. This increase has significantly affected
the performance of the market due to their lower value, which has
restricted overall market growth in value terms.
The furniture
market is very responsive to swings in consumer confidence, changes in
disposable income and to activity levels in the housing market. Due to
the deferrable nature of big-ticket items such as dining room furniture,
there is often a lengthy replacement cycle, with purchases often seen as
non-essential and delayed during periods of financial uncertainty.
However, one area
of the market that has grown significantly over recent years is flat
pack/self-assembly furniture. The growth and continued popularity of
IKEA, together with the growing significance of Argos has also supported
the share taken by flat-pack furniture over assembled furniture.
Key influences in
the dining sector include smaller rooms sizes in the new build
sector, which is driving the demand for smaller, flexible dining
furniture, e.g. extendable tables, foldaway tables and chairs. In
addition, the traditional dining room has changed in recent years as
‘open plan’ living has increased, with many houses now containing a
kitchen/diner or a living/diner rather than a conventional dining room.
This influences the style and size of furniture purchased with overall
design co-ordination with kitchen or living furniture a key factor.
The demand for smaller and more functional furniture
items has benefited the occasional sector. The need for adequate
storage and display items, particularly in relation to electronic
equipment has supported the growth of some product areas within the
occasional sector. For example, wall units have increased in popularity,
largely due to the increasing pressure on space, and the amount of
storage they provide. In addition, the variety of add-on features now
available, such as doors and drawers, and the emergence of modular
furniture that can be used in a variety of areas throughout the home
have contributed to their popularity.
The overall
furniture market has become much more diverse, with trends moving in
many different directions as consumers have become more adventurous and
respond to new and innovative designs and styles. The dining and
occasional furniture market is also moving with this trend, although the
market still continues to be dominated by wood and wooden derivatives,
there has been the recent emergence and growth of other materials
including, metal, glass and marble.
There has been
significant activity within the supply and distribution structure with a
number of key companies terminating their activities within the dining
and occasional sector. Silentnight has disposed of its cabinet
division; Durham Pine and Stag have been placed in
administration and Parker Knoll re-launched in the latter half of
2005. Major suppliers within the dining and occasional market
include H. Morris & Co. (G-Plan, Morris Furniture and
Beautility), Wade and Ercol. The market remains highly
fragmented with imports accounting for a significant share of the market
along with smaller, more specialist suppliers.
Distribution has
also witnessed a high level of corporate activity, with major suppliers
such as Courts and Furnitureland going into
administration. Furniture Multiples continue to dominate the overall
distribution sector, largely due to their strength in national coverage.
Department stores and variety stores have increased their market share,
as they increase their portfolios. The Catalogue store sector has also
been boosted by the growth of
Argos
in recent years.
Forecasts for the
future performance of the market are relatively flat, reflecting a very
mature market. Ultimately, future sales will be dependent on a number of
factors including the performance of the housing market, interest rates,
the future level of imports and general levels of consumer confidence. |
